16th September 2019
Federal Court Case to be appealed
On 21 August 2019, the Full Federal Court of Australia handed down a decision regarding the accrual of Personal Leave for Full Time shift workers. The decision deals with the method of accruing and taking paid personal/carer’s leave for the purposes of the National Employment Standards under the Fair Work Act 2009.
Full Time Workers are entitled to 10 working days personal leave under the National Employment Standards. The debate surrounds workers that work longer shifts and have more actual days not working during the week. Confusion surrounds the calculation of Personal Leave in hours vs working days. The Fairwork Ombudsman has advised "For every day of personal/carer’s leave taken, an employer deducts a day from the employee’s accrued leave balance. If an employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance."
Small Business Ombudsman Kate Carnell (ASBFEO), COSBOA and others are working with Government to get a logical application of the law explained and put into place.
Fairwork have made a few comments
in reaction to the case, and have also updated their information page
regarding Personal Leave Accrual. Details of the case ruling can be found here
ICB recommend employers continue to accrue a liability for Personal leave based on the amount that a worker would have “otherwise been working” on that day.
- A part time worker who works 3 days, 5 hours a day each week, would accrue 6 days of 5 hours of personal leave over a year, ie. what they would have worked over a standard 10 days of “work time”: they would have worked 6 out of those 10 and for 5 hours per day. When they took personal leave for a day that they would have been working they would be paid the same as if they were otherwise working ie. 5 hours.
- If a worker works 3 days of 12 hour shifts per week then they would accrue 6 days of 12 hours. If they take personal leave on a day they would be working then they get paid for 12 hours.
- If a worker works 5 days of 7.6 hours then they would accrue 10 days of 7.6 hours. If they take personal leave on a day then they would be paid 7.6 hours.
This pro-rata leave attribution mathematically works in payroll by accruing personal leave at a rate related to the hours they work, ie. nothing changes in payroll just yet.
ICB is watching this develop and will issue guidance of any changes required for bookeepers and employer businesses which may result.